The Ministry of Heavy Industries (MHI) has written to the Union Finance Ministry, supporting the auto industry’s demand for a reduction in GST on CNG two-wheelers from 28% to 18%, sources privy to the development told CNBC-TV18.
This follows inputs from the Automotive Research Association of India (ARAI), the Ministry of Environment, the Ministry of Road Transport and Highways (MoRTH), and the Ministry of Petroleum and Natural Gas (MoPNG).
The MoPNG noted that reducing GST could boost demand for CNG two-wheelers, enhance their penetration nationwide, and contribute to lower carbon emissions, sources in the know told CNBC-TV18.
MoRTH and the Ministry of Environment have also endorsed the proposal, sources close to the development said.
The move aligns with a request made by auto industry bodies in June 2024, after which the Ministry of Heavy Industries sought feedback from various stakeholders before reaching out to the Finance Ministry.
Last year in August, Bajaj Auto had sought a reduction in Goods and Services Tax (GST) on CNG two-wheelers. Bajaj Auto has sought that CNG two-wheelers be considered under the EV vehicles category, which currently attracts 5% GST.
